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4 tips for strategic financial planning

Strategic financial planning is one of the most important things you can do for your business. 

An effective plan will help you grow in the government contracting space sustainably and successfully. Planning also empowers you to allocate resources effectively, secure funding, manage risks, and set competitive pricing.

But knowing what to prioritize and focus on can be difficult if you’ve never financially managed a business before.

Our expert coach can help guide you on this journey. Ryan Hemminger, Fearless CFO and Hutch finance coach, hosts several intensive sessions on Financial Management as part of our 24-month program. We’re sharing Ryan’s top tips for managing your businesses finances, and mistakes to avoid.

1. Use cash flow projections to track the financial health of your business.


When it comes to effective financial management, you might assume our number one tip would be around pricing or taxes. And, while we do get into those, we wanted to start with the most important information first.

Illustration of coins to represent the importance of financial planning

For Ryan, “cash flow is the most important thing when it comes to strategic financial planning. Your cash flow will tell you whether you’re in business or out of business.” It’s a valuable asset that will help you understand whether your business is thriving or teetering on the edge of solvency.

What is cash flow?

Essentially, cash flow is the moving of money in and out of your business.

According to Ryan, “cash flow tells you when the actual cash occurs in the bank account. It’s how much money is coming in and how much is going out.” 

To keep track of your cash flow, you need to start a new daily habit.

“If you’re not looking at your bank account balance every day, you’re doing it wrong.”

Cash flow projection.

While cash flow shows when funds enter and exit your bank account, a cash flow projection is a financial statement that’s used to predict cash moving in and out of the business. 

Why use cash flow projection?

Using cash flow projection on your strategic financial planning journey will help you:

  • Predict your sales cycle,
  • Plan major purchases or hiring,
  • Establish a break even point,
  • Track liquidity,
  • Determine financing needs.

It can also alert you to financial trouble. If you spot trouble, you can either reduce expenses or access your credit. 

Cash flow projection process.

Your monthly cash flow projection process should involve:

  1. Examining your bank account, 
  2. Logging all revenue, 
  3. Logging all expenses,
  4. Projecting this information out for at least the next quarter; preferably 12 months. 

By following this process, you can spot trouble several months in advance. 

2. Keep pricing consistent and honest.

illustration of a hand holding a coin

Figuring out pricing can feel like a daunting task when you’re new to financial management and managing your own business. But as you build your rate, remember the value of consistency and honesty.

“Whatever pricing methodology you pick when you start your strategic financial planning journey,” says Ryan, “just keep it consistent. Most small businesses find themselves in hot water because they shifted from one opportunity to the next.”

And remember to “be as honest as possible when creating your pricing structure.” Don’t assume you won’t get caught inflating your costs. Because even if you get away with it today, they’ll notice it later.

Common pricing mistakes.

While there’s no standard pricing model that you can use for your strategic financial planning, there are some common pricing mistakes that you can avoid. 

  • Not calculating indirect costs — People often price too low because they forget that there are costs besides their employee’s salaries that are incurred. 
  • Dropping your fee down to zero to win — You’re not a nonprofit, so don’t drop your fee to zero. Doing so will leave you with no flexibility in your contract.
  • Failing to account for administrative hours needed — Failing to account for your—or anyone else’s—time creating and monitoring the bid and other administrative tasks.
  • Failing to justify all the costs — The government will ask you questions about your work, and you will need to justify everything to them. When you do, make sure you’re honest. Because it’s far worse to get caught lying than to tell the truth upfront. 

3. Take advantage of tax credits.

Tax credits are a valuable resource that all small businesses should take advantage of as part of their strategic financial planning. 

Unlike a deduction, which is a reduction of your taxable income, tax credits allow you to subtract from the amount of taxes you owe to the government.

“Tax credits are far more valuable than deductions. And it’s through credits that you’ll save your money.”

But there are a lot of tax credits out there, and it’s not always easy to tell which ones will be valuable to you and your business.

We’ve put together a list of Maryland and federal tax credits to help you begin this process.

Maryland tax credits.

  • Employer Security Clearances Costs (ESCC) — If you’re a small business that does security-based contract work, you can get income tax credits for expenses related to federal security clearance costs, construction of Sensitive Compartmented Information Facilities (SCIFCs), and first-year leasing costs.
  • Buy Maryland Cybersecurity (BMC) — This is specifically for Maryland cybersecurity companies with 50 or fewer employees. It provides an income tax credit of 50% of the purchase price for cybersecurity goods, products, or services from Qualified Maryland Cybersecurity Sellers (QMCS).
  • Enterprise Zone (EZ) — This tax credit is location based, and it provides property and state income tax credits for businesses located in a Maryland Enterprise Zone in return for job creation and investments.
  • Hire Our Veterans — If you’re a small business that hires qualified veterans, you can get a state income tax credit based on the wages you pay to those veteran employees.
  • Maryland Opportunity Zone Enhancement (State Program) — Businesses that are located in federal Opportunity Zones and that meet certain requirements can get enhanced tax credits through the Maryland Department of Commerce’s tax credit programs.
  • Job Creation Tax Credit (JCTC) — You can get state income tax credits of up to $3,000-$5,000 per job by creating a minimum number of new full-time positions in a revitalization area.
  • One Maryland — By investing in an economic development project in a Tier 1 County and creating a minimum number of new jobs, you may qualify for a state income tax credit of up to $5 million. This amount depends on the number of jobs created and amount of eligible costs.
  • Research and Development — If your business has qualified research and development expenditures in Maryland, you might qualify for two state income tax credits: the Basic R&D Tax Credit, and the Growth R&D Tax Credit. 

Federal tax credits.

  • Small Employer Health Insurance Premiums — This tax credit allows you to write off the cost of setting up your medical plan if you’re a small employer. An important note: if you’ve already set up your medical plan, you can’t retroactively apply for this credit.
  • Small Employer Pension Plan Startup Costs — When you set up your 401K, you can get a tax credit for the startup costs. An important note: if you’ve already set up your 401K, you can’t retroactively apply for this credit.
  • Paid FMLA — If you offer paid family and medical leave, you can receive a federal tax credit.

Ask your accountant about tax credits.

If you’re interested in taking advantage of any of these state and federal tax credits as part of your strategic financial planning, we suggest sharing them with your accountant. They’ll be able to help you determine if you’re eligible and whether you should apply for them. 

Also ask your accountant if you can “take advantage of any of these credits historically,” says Ryan. This would help you determine if you need to restate your taxes to apply the credits retroactively. 

4. Bring in experts when you need to.

Icon of hands shaking to symbolize the importnace of partnership in financial planning

When it comes to financial management, you shouldn’t be expected to be an expert. In fact, it’s often better in the long-run to spend the money and hire experts that will help you and your business thrive.

Ryan says three of the most valuable resources you can outsource are:

  1. Insurance brokers,
  2. 401K brokers,
  3. Tax accountants (in fact, you should never do your own taxes).

At Hutch we remind our companies, just because you’re running your own business, doesn’t mean you have to do it alone. And it’s better to bring in experts who can help your business thrive, rather than assuming you can do everything on your own. 

Learn more strategic financial planning tips from the Hutch team.

We understand financial management can feel overwhelming. But these tips from our finance coach will help you on your strategic financial planning journey.

By using cash flow projections, being honest and consistent in pricing, taking advantage of tax credits, and bringing in experts when you need, you’ll be better prepared to grow in the government contracting space sustainably and successfully.

Want to learn more from our experts? Applications are now open for the 2025 class.

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